Energy storage installations in the world will reach 358 GW by the end of 2030, more than twenty times the 17 GW at the end of 2020, according to the Global Energy Storage Outlook – a study carried out by BloombergNEF (BNEF).
According to the research firm, this boom will require more than US$262 billion in investments. The report further highlighted that the United States and China are the two largest markets, accounting for more than half of storage facilities over the next ten years.
According to the company, the clean energy ambitions of state governments and utilities are driving battery deployment in the US. In China, the installation target of 30 GW of cumulative construction by 2025 and stricter renewable integration rules will further heat up this segment.
Other key markets include India, Australia, Germany, the United Kingdom and Japan. Supportive policies, ambitious climate commitments and the growing need for flexible resources are what will drive the sector forward.
Regionally, BNEF pointed out that Asia-Pacific will lead capacity on a megawatt basis by 2030, but the Americas will build more on a megawatt-hour basis.
Europe, the Middle East and Africa lag behind their counterparts due to a lack of targeted storage policies and incentives. The study also indicated that growth in the region could accelerate as renewables penetration increases, more fossil fuel generators exit and the battery supply chain becomes more localized.
“The global storage market is growing at an unprecedented rate. The falling costs of batteries and increasing penetration of renewables make storage a flexible and attractive resource in many energy systems,” said Yiyi Zhou, clean energy expert at BNEF and lead author of the research.
In Zhsou's view, such projects are growing in scale, increasing dispatch duration and are increasingly associated with renewables. The BloombergNEF forecast suggests that the majority, or 55%, of storage built by 2030 will be to provide energy transfer – primarily solar with batteries, which are becoming even more common around the world.
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Another point highlighted is that batteries installed by the customer, both residential and commercial and industrial, will also grow at a constant pace. Germany and Japan are currently the main countries, with sizeable markets in Australia and the US.
BNEF expects energy storage located in homes and businesses to represent about a quarter of installations in this segment by 2030. Consumers' desire to use more solar energy is a key driver.
Other applications, such as using storage to defer grid investment, could remain marginal in most markets until 2030. Construction could increase if regulatory barriers are removed and incentives are aligned for grid owners to consider storage as an alternative to investment in traditional infrastructure.
“This is the decade of storage. We have anticipated significant scale-up for many years and the industry is now more than ready to deliver,” added Yayoi Sekine, head of decentralized energy at BNEF.
Furthermore, he emphasized that rapidly evolving battery technology is driving the sector. According to the report, the industry is adopting various chemistries for lithium-ion batteries. In 2021, lithium iron phosphate (LFP) will be used more than nickel manganese cobalt (NMC) for stationary storage for the first time.
In the event, LFP will become the leading chemical choice for lithium-ion batteries in the storage sector until at least 2030, driven by its dominant role in China and growing penetration in the rest of the world.
The Global Energy Storage Outlook also updated its technology outlook to include sodium-ion batteries, which could play a significant role in 2030.
Other technologies
The study also indicated that many technologies are under development, such as compressed air and thermal energy storage. Many of these can provide longer dispatch duration compared to batteries, looking to supply during prolonged periods of low renewable energy generation in future zero-power systems.
However, BNEF expects batteries to dominate the market until at least the 2030s, largely due to their price competitiveness, established supply chain and significant track record. “If new technologies successfully overtake lithium-ion, then total uptake may well be higher,” BloombergNEF concluded.
